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    Swiss banks UBS, Credit Suisse get emergency funds to fight crisis

    HotNewsTurkey with wires
    16.10.2008 - 09:59 | Son Güncelleme: 16.10.2008 - 11:50

    Switzerland's two largest banks will receive emergency funding from the country's government and other investors to shore them up against the financial crisis, the banks said on Thursday.

    The Swiss government will give UBS, the country's largest bank, a capital injection of 6 billion Swiss francs ($5.3 billion) in the form of mandatory convertible notes.

    "The Federal Council is confident that this package of measures will contribute to the lasting strengthening of the Swiss financial system,'' the government said today in a statement."The resulting stabilization is beneficial for overall economic development in Switzerland and is in the interests of the country as a whole.''

    UBS's extra capital, if converted into shares at a price of 20 francs, would give the Swiss government a 9 percent stake in the European bank with the largest write downs in the credit crisis. The plan doesn't make the government a co-owner and leaves it an option to withdraw during the loan, it added.

    Switzerland's second-largest bank Credit Suisse Group AG said it had increased its Tier 1 capital by about 10 billion francs from several major investors, including a subsidiary of the Qatar Investment Authority, as it also announced a net loss of about 1.3 billion francs for the third quarter.

    In a separate statement, the Swiss National Bank created a special purpose vehicle for the orderly liquidation of illiquid assets, allowing UBS to transfer troubled assets of up to $60 billion.

     

     

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